First Majestic Reports First Quarter Financial Results
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FIRST MAJESTIC SILVER CORP .
Suite 1805 – 925 West Georgia Street
Vancouver, B.C., Canada V6C 3L2
Telephone: (604) 688‐3033 Fax: (604) 639‐8873
Toll Free: 1‐866‐529‐2807
Web site: www.firstmajestic.com; E‐mail: [email protected]
NEWS RELEASE
New York ‐ AG May 4, 2017
Toronto – FR
Frankfurt – FMV
Mexico ‐ AG
First Majestic Reports First Quarter Financial Results
FIRST MAJESTIC SILVER CORP . (AG: NYSE; FR: TSX) (the "Company" or “First Majestic”) is ple ased to announce the unaudited
interim consolidated financial results of the Company for the first quarter ended March 31, 2017. The full version of the financial
statements and the management discussion and analysis can be vi ewed on the Company's web site at www.firstmajestic.com
or on SEDAR at www.sedar .com and on EDGAR at www.sec.gov. All amounts are in U.S. dollars unless stated otherwise.
FIRST QUARTER 2017 HIGHLIGHTS
(compared to Fourth Quarter 2016)
• Silver equivalent production decreased 3% to 4.3 million ounces
• Silver production decreased 4% to 2.7 million ounces
• All‐in sustaining costs (“AISC”) decreased 5% to $12.21 per payable silver ounce
• Revenues increased 4% to $69.1 million
• Realized average silver price increased 3% to $17.55 per ounce
• Mine operating earnings increased 1% to $10.0 million
• Net earnings increased 50% to $2.7 million (Basic EPS of $0.02)
• Adjusted earnings, excluding non‐cash and non‐recurring items, totaled $3.7 million (Adjusted EPS of $0.02)
• Operating cash flows before working capital and taxes increased 14% to $26.6 million or $0.16 per share (non‐GAAP)
• Cash costs increased 3% to $6.68 per payable silver ounce (net of by‐product credits)
• Cash and cash equivalents totaled $127.6 million at the end of the quarter
“Lower all‐in sustaining costs and higher realized silver price s drove strong earnings and cash flows during the first quarter ,”
stated Keith Neumeyer, President and CEO of First Majestic. “We achieved our cost targets during the quarter due in part to
higher by‐product production at San Martin and the weaker Mexic an Peso which helped to offset the unexpected increase in
energy costs at the beginning of 2017. Over the remainder of the year, we anticipate gradual production improvements as
exploration and development activities accelerate and additional mining levels are brought into production.”
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OPERATIONAL AND FINANCIAL HIGHLIGHTS
Key Performance Metrics 2017‐Q1 2016‐Q4
Change
Q1 vs Q4 2016‐Q1
Change
Q1 vs Q1
Operational
Ore Processed / Tonnes Milled 822,336 844,155 (3%) 789,591 4%
Silver Ounces Produced 2,708,978 2,819,708 (4%) 3,074,173 (12%)
Silver Equivalent Ounces Produced 4,267,350 4,380,477 (3%) 5,083,095 (16%)
Cash Costs per Ounce (1) $6.68 $6.49 3% $5.00 34%
All‐in Sustaining Cost per Ounce (1) $12.21 $12.90 (5%) $8.97 36%
Total Production Cost per Tonne (1) $44.72 $42.13 6% $42.72 5%
Average Realized Silver Price per Ounce (1) $17.55 $17.10 3% $15.08 16%
Financial (in $millions)
Revenues $69.1 $66.2 4% $66.5 4%
Mine Operating Earnings (2) $10.0 $9.9 1% $9.4 7%
Net Earnings (Loss) $2.7 $1.8 50% ($7.4) 137%
Operating Cash Flows before Working Capital and Taxes (2) $26.6 $23.4 14% $25.0 6%
Cash and Cash Equivalents $127.6 $129.0 (1%) $61.7 107%
Working Capital (1) $136.8 $130.6 5% $57.8 137%
Shareholders
Earnings (Loss) per Share ("EPS") ‐ Basic $0.02 $0.01 50% ($0.05) 135%
Adjusted EPS (1) $0.02 ($0.01) 325% $0.03 23%
Cash Flow per Share (1) $0.16 $0.14 13% $0.16 1%
(1) The Company reports non‐GAAP measures which include cash costs per ounce, all‐in sustaining cost per ounce, total production cost per
ounce, total production cost per tonne, average realized silver price per ounce, working capital, adjusted EPS and cash flow p er share.
These measures are widely used in the mining industry as a benc hmark for performance, but do not have a standardized meaning a nd
may differ from methods used by other companies with similar descriptions.
(2) The Company reports additional GAAP measures which include mine operating earnings and operating cash flows before movements in
working capital and income taxes. These additional financial measures are intended to provide additional information and do not have a
standardized meaning prescribed by IFRS.
FINANCIAL REVIEW
The Company realized an average silver price of $17.55 per ounce during the first quarter of 2017, representing a 16% increase
compared with the first quarter of 2016 and a 3% increase compared to $17.10 in the prior quarter .
Revenues generated in the first quarter totaled $69.1 million, an increase of $2.6 million or 4% compared to $66.5 million in the
first quarter of 2016. The increase in revenue was primarily due to a 16% increase in average realized silver price, partially offset
by 15% decrease in silver equivalent ounces sold.
Mine operating earnings were $10.0 million in the quarter compared to $9.4 million in the first quarter of 2016. The increase in
mine operating earnings was driven by higher silver prices.
Cash flow from operations before movements in working capital and income taxes in the quarter was $26.6 million ($0.16 per
share) compared to $25.0 million ($0.16 per share) in the first quarter of 2016.
The Company generated net earnings of $2.7 million (EPS of $0.02) in the first quarter compared to net loss of $7.4 million (loss
per share of $0.05) in the first quarter of 2016. Excluding all non‐cash and non‐recurring items, the Company generated adjusted
earnings of $3.7 million ($0.02 per share) during the quarter .
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The Company held $127.6 million in cash and cash equivalents at the end of the quarter, reflecting a 1% decrease compared to
the prior quarter . The Company’s working capital position increased 5% to $136.8 million compared to $130.6 million at the end
of the prior quarter .
OPERATIONAL HIGHLIGHTS
The table below represents the quarterly operating and cost parameters at each of the Company’s six producing silver mines.
First Quarter Production Summary Santa Elena La Encantada La Parrilla Del Toro San Martin La Gui tarra Consolidated
Ore Processed / Tonnes Milled 230,050 266,510 140,592 79,108 69,563 36,514 822,336
Silver Ounces Produced 581,425 707,479 479,875 340,958 410,082 189,159 2,708,978
Silver Equivalent Ounces Produced 1,369,875 708,959 667,431 682,219 522,672 316,195 4,267,350
Cash Costs per Ounce $1.54 $10.83 $9.96 $2.64 $6.42 $6.36 $6.68
All‐in Sustaining Cost per Ounce $4.61 $12.07 $13.86 $7.95 $8.66 $11.83 $12.21
Total Production Cost per Tonne $52.90 $27.92 $43.22 $51.58 $61.28 $75.33 $44.72
Production in the quarter totalled 4.3 million silver equivalent ounces consisting of 2.7 million ounces of silver, 15,047 ounces
of gold, 7.5 million pounds of lead and 0.9 million pounds of zinc. Compared to the previous quarter, total production decreased
by 3% primarily attributed to a 3% decrease in tonnes milled due to a breakdown of one of the four power generators at Santa
Elena causing a temporary reduction in the mill feed from the h eap leach pad in the month of February. The generator was
successfully replaced in late February allowing the heap leach pad to return to normal operations in March.
COSTS AND CAPITAL EXPENDITURES
Cash costs for the quarter were $6.68 per payable ounce of silv er, representing a 3% increase compared to the prior quarter .
The increase in cash cost per ounce was primarily due to higher energy costs attributed to Mexico's Energy Reforms, which first
became law in August 2014, and the resulting gas deregulation e ffective January 2017 causing reduction in energy subsidies.
Since the beginning of the year, diesel and electricity costs have increased by approximately 20% to 30%. Cash cost per ounce
was also affected by lower silver production in the quarter .
Consolidated AISC for the quarter were $12.21 per ounce, representing a 5% decrease compared to the previous quarter and
within the Company’s annual cost guidance of $11.96 to $12.88 p er ounce. The decrease in AISC was primarily attributed to a
decrease in sustaining capital expenditures due to a slower than expected initiation of exploration and development activities
at the beginning of the year . Sustaining costs are expected to increase in the next quarter to meet program targets for 2017.
Total capital expenditures in the first quarter were $19.1 mill ion, a decrease of 26% compared to the prior quarter , primarily
consisting of $6.0 million at Santa Elena, $2.4 million at La Encantada, $2.9 million at La Parrilla, $1.8 million at Del Toro,
$2.2 million at San Martin and $3.0 million at La Guitarra. The decrease in capital expenditures is the result of limited exploration
and development activities in January due to a delayed start in negotiating annual land access agreements. However, exploration
and development activities are expected to accelerate in the second quarter to meet annual budget targets by year end.
ABOUT FIRST MAJESTIC
First Majestic is a mining company focused on silver production in Mexico and is aggressively pursuing the development of its
existing mineral property assets. The Company presently owns an d operates six producing silver mines; the La Parrilla Silver
Mine, the San Martin Silver Mine, the La Encantada Silver Mine, the La Guitarra Silver Mine, Del Toro Silver Mine and the Santa
Elena Silver/Gold Mine. Production from these six mines is proj ected to be between 11.1 to 12.4 million ounces of pure silver
or 16.6 to 18.5 million ounces of silver equivalents in 2017.
FOR FURTHER INFORMATION contact [email protected], visit o ur website at www.firstmajestic.com or call our toll free
number 1.866.529.2807.
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FIRST MAJESTIC SILVER CORP .
“signed”
Keith Neumeyer, President & CEO
SPECIAL NOTE REGARDING FORWARD‐LOOKING INFORMATION
This news release includes certain "Forward‐Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities laws. When used in this news release, the words “anticipate” , “believe” , “estimate” , “expect” , “target” , “plan” , “forecast” , “may” ,
“schedule” and similar words or expressions, identify forward‐l ooking statements or information. These forward‐looking statements or information relate to,
among other things: the price of silver and other metals; the accuracy of mineral reserve and resource estimates and estimates of future production and costs
of production at our properties; estimated production r ates for silver and other payable metals produced by us, the estimated cost of development of our
development projects; the effects of laws, regulations and government policies on our operations, including, without limitation , th e la w s in M e xic o w h ic h
currently have significant restrictions related to mining; obtaining or maintaining necessary permits, licences and approvals from government authorities; and
continued access to necessary infrastructure, including, without limitation, access to power, land, water and roads to carry on activities as planned.
These statements reflect the Company’s current views with respe ct to future events and are necessarily based upon a number of assumptions and estimates
that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and
contingencies. Many factors, both known and unknown, could caus e actual results, performance or achievements to be materially different from the results,
p e r f o r m a n c e o r a c h i e v e m e n t s t h a t a r e o r m a y b e e x p r e s s e d o r i m plied by such forward‐looking statements or information and the Company has made
assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in the spot and forward price of
silver, gold, base metals or certain other commodities (such as natural gas, fuel oil and electricity); fluctuations in the cu rrency markets (such as the Canadian
dollar and Mexican peso versus the U.S. dollar); changes in national and local government, legislation, taxation, controls, regulations and political or economic
developments in Canada, Mexico; operating or technical difficulties in connection with mining or development activities; risks and hazards associated with the
business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures,
cave‐ins and flooding); risks relating to the credit worthiness o r f i n a n c i a l c o n d i t i o n o f s u p p l i e r s , r e f i n e r s a n d o t h e r p a r t i es with whom the Company does
business; inability to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on mining,
including those currently enacted in Mexico; employee relations ; relationships with and claims by local communities and indige nous populations; availability
and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining
necessary licenses, permits and approvals from government authorities; diminishing quantities or grades of mineral reserves as properties are mined; the
Company’s title to properties; and the factors identified under the caption “Risk Factors” in the Company’s Annual Information Form, under the caption “Risks
Relating to First Majestic's Business” .
Investors are cautioned agains t attributing undue certainty to forward‐looking statements or in formation. Although the Company has attempted to identify
important factors that could cause actual results to differ materially, there may be other factors that cause results not to be anticipated, estimated or intended.
T h e C o m p a n y d o e s n o t i n t e n d , a n d d o e s n o t a s s u m e a n y o b l i g a t i o n, to update these forward‐looking statements or information to reflect changes in
assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable law.